The Government of the Republic of Mali plans to partially lift the suspension of mining permits by 15 March, a move West Africa-focused explorer Toubani Resources (ASX:TRE) says provides more certainty for the industry.
With the partial lifting of the suspension, which has been in place since November 2022, the Ministry of Mines will again allow the submission of applications to renew search and exploitation permits, applications to transition from search to exploitation, and applications to transfer exploitation permits.
However, the allocation of new mining permits, as well as the transfer of search permits, remain suspended.
Investment in the country’s mining sector had been in a state of flux since the government issued a moratorium on the administration of all new licences, permits, and approvals while it audited mining operations and undertook a comprehensive review of the 2019 Mining Code.
The suspension was part of “major work to clean up the mining register”.
Toubani Resources Managing Director Phil Russo tells Mining.com.au the partial lifting of the ban on mining and exploration permits points to an industry starting to normalise.
“Integral to any mining industry is the normal course of business, just being able to get your licences approved and that technical body of Mali that administers that has not been functioning for several years,” he says.
“So for it to now be functioning means the industry, the existing industry that is already there and is trying to advance their projects from exploration into mining, now that will start to move forward again, and that’s just healthy for everyone.”
Russo says the move will also improve collaboration between industry and government because explorers like Toubani now understand the process for the submission of permitting documents.
“We know what the government department’s going to do and when they’re going to do it. The industry likes certainty and so to have that body moving forward again, is just going to be healthy for the engagement between industry and mining,” he says.
The main focus for Toubani is the long-term future of its 2.2-million-ounce Kobada Gold Project, rather than the immediate short-term ructions.
The aim of Mali’s updated mining code is to increase the country’s share of revenues generated from the mining sector by raising the ownership interest the government and local community can acquire in projects.
But this is not something unique to Africa, and is occurring all around the globe as evidenced by this week’s news that Indonesia is reviewing its royalty structure on a range of commodities with a view to potentially increasing the share it receives from its mining sector.
Even certain Australian states are making moves to protect their royalty structures, with the outgoing Miles government in Queensland last year introducing legislation to make it harder for the newly elected Crisafulli government to implement cuts to coal royalties.
“You have to have a long-term view of Africa and I think the larger question about just all these emerging countries wanting a greater share of the pie, that’s nothing new,” Russo explains.
“We think that’s going to be a growing theme across the world over and so the industry has to adapt.
“So, for us, Mali’s new code is not that dissimilar to what is happening in things like Indonesia, Burkina Faso, and other places in the world.
“They’ve just gone about it a bit more vocally, but I think once the dust settles, you can find that industry can work with the government on that code, and that’s a good place to be.”
Recent agreements struck in Mali demonstrate the sector is adapting well to the new investment framework.
Companies like Allied Gold (TSX:AAUC), B2Gold (TSX:BTO), Robex Resources (TSX-V:RBX), Kodal Minerals (LSE:KOD) and Hummingbird Resources (LSE:HUM) have all reached agreements with the Mali government.
Toubani is currently finalising its investment framework with Mali to secure the long-term future of the Kobada Project – approaching discussions on a “partnership” basis.
Importantly, Toubani has the support of the community and government for the development of Kobada.
“For us in a country, we ask ourselves two questions: does the local community support mining in the project and does the state government support the project?” Russo tells this news service.
“And you answer yes to both those questions and the rest is just things you need to discuss and navigate your way through.”
Kobada is expected to deliver more than US$1.2 billion in direct future economic benefits for Mali and according to Russo, that is at much lower gold prices than where the price of the precious metal is currently sitting.
The project will provide up to 1,500 jobs during construction and over 1,000 across its operational life.
“Then there’s the multiplier benefits that that is not capturing. So the flow-on effects are enormous, and it’s important to state that the significance of Kobada is really meaningful,” Russo notes.
When Kobada comes online it will be Mali’s fifth largest gold mine and a significant producer for the country.
“Once built, and hopefully it won’t take us too long to do that, it’s going to be spitting off benefits for them immediately.”
An updated Definitive Feasibility Study completed in October 2024 places Kobada as one of the lowest capital intensity development projects in the sector — with an initial upfront cost of US$216 million ($343.5 million).
The project is estimated to have a post-tax net present value (NPV) of US$635 million and an internal rate of return (IRR) of 58% at a gold price of US$2,200 an ounce.
At a higher assumed gold price of US$2,600 an ounce, the NPV increases to US$897 million and the IRR climbs to 73%. The study estimates Kobada could be producing at an all-in sustaining cost of US$1,004 an ounce.
Toubani is working on de-risking the project towards shovel-ready status in 2025.
Write to Angela East at Mining.com.au
Images: Toubani Resources
